Denise (“D”) works as a paralegal and holds two side businesses too! She and her husband Bob divorced on 12/25/17 – Merry Christmas! She did not file her 2017 tax return and needs your help.   Here are the transactions during 2017, unless noted otherwise 

Salary - D		$80,000
Salary - Bob		50,000
Interest income on bonds—(owned by Denise)
Issued by City of Newark NJ		$7,000
Issued by Apple Corporation		11,000
Dividend income – Microsoft Corp (owned by Bob)		$3,000
Recovery from car accident—Denise
Cash received for - Personal injury damages (broken leg)		200,000
Payment for emotional damage she suffered (nightmares, etc)		110,000
Gift from parents of the child (side job)		30,000
Salary from the parents of the child (side job)		$1
Inheritance received from deceased uncle		100,000
Prize – raffle Denise bought		500
Child support paid by D to Bob– starting 1/1/18 – monthly		1,000
City and state income taxes paid by Denise		(4,000)
Bank loan obtained to buy refrigerator – for Denise side business		2,000
Net Profit from D’s side business – Cupcakes By D		2,000
Paid first alimony payment to Bob on 12/31/17		(1,000)
Loss on sale of bicycle used for personal pleasure		(400)
Gain on sale of boat owned for personal use		5,000
Gain on sale of Dupont stock (held for 18 months as an investment)		6,000
Property taxes paid		(12,000)

Denise has 2 children under age 8, who lived with Bob after the divorce and who he supports and will support more than 50% of the cost to raise them. She hardly ever sees the kids! Denise’s ex-husband Bob died in 2019 - sad.

Look at the tax formula – “all income” and take out amounts that can be excluded. That’s the starting point. Then certain “above the line” adjustments get made to arrive at AGI. Then certain “below the line” adjustments get made to arrive at Taxable Income.

What is D’s “Adjusted Gross Income” for 2017? ______________

What is D’s taxable income for 2017? _______________

Assume – Standard Deduction – 2017 – Single $6000; HOH $9,000; MFJ $12,000.

                                                    -2018 – Single 12,000; HOH $18,000; MFJ $24,000